Oil Prices

Let's see if I can keep this simple and not talk about really complicated futures, countervailing factors, etc. this morning.

This weekend, the non American oil producers met to discuss the possible cut of oil output in light of the lessening of demand of oil due to the Coronavirus.

As I write this, oil is in the $31-32 dollar a barrel range. Last week, oil was in $40+ oil range.

Both OPEC and the Russian oil company agreed to nothing and walked away from the table in Austria.

The Saudi's decided to up the output of oil in an attempt to put the Russians and to a lesser extent, US oil producers out of business.

At the same time the Russian oil company announced they would increase oil production in March and again, increase oil production in April. Also, to put U.S. oil producers, mostly frackers out of business.

It generally costs US producers $40-50 dollars a barrel to continue drilling.

Here is the interesting point, the Russians in the end can't keep up with the Saudi's. The Saudi's still make a profit at single digits. Trouble is, the Saudi Arabian economy is set much higher a barrel  to keep going.

I know Goldman Sachs has suggested that oil could go to $20 a barrel.

If this continues, oil companies will start to lay off people. Expansion will be stopped( Makes me wonder about the Orange County proposed Chevron plant?)

I know some of you are wanting to buy, and I am looking hard at certain stocks, but I am still waiting.

And watching....And worry, this area is a "One Trick Pony" and oil is that pony.

It is a concern.